China's northern port thermal coal market remained resilient approaching the end of the week, though fast-elevated prices encountered weaker buying interest amid growing expectations of improved mine supply. Falling port inventories and preparations for the winter heating season continued to underpin the market.

Trading activity eased, with downstream buyers increasingly reluctant to accept further increases. Several sources noted that recent government meetings on supply guarantees have intensified, raising expectations of a resumption in production and prompting both sellers and buyers to adopt a wait-and-see stance.

The market nevertheless remained supported by tight spot availability and higher replacement costs. Coal stocks at Qinhuangdao, Caofeidian, Jingtang and Huanghua ports fell for a sixth consecutive day to 23.45 million tonnes on October 15. The number of anchored vessels reached 101 on October 15, down slightly from 108 a day earlier but still elevated compared with around 90 in late September, suggesting ships are waiting while cargo availability remains thin.

Some traders still expected prices to stay firm into the start of the winter heating season, citing limited inventory accumulation and the prospect of seasonal restocking by power plants and heat suppliers.

One northern China-based trader source said they had retained several tens of thousands of tonnes of inventory after making some sales before the holiday and was still building stocks, with no immediate plan to sell. Another participant said the cost of procuring coal from production areas kept elevating, making lower-priced replacement cargoes increasingly difficult to secure.

High-CV material remained tight, underpinning offers and deals at high levels. Offers of low-sulfur 5,500 Kcal/kg NAR coal were heard largely above 1,050 yuan/t, FOB northern ports with VAT, while a deal was heard fetched at 1,055 yuan/t.

Cargoes of 5,000 Kcal/kg NAR Shanxi coal with 1.0% sulfur changed hands at around 940 yuan/t, while a separate source reported an offer for 0.8%-sulfur same-CV Shanxi coal at 945 yuan/t. Supply of Shanxi-origin coal remained constrained, resulting in scarce low-priced availability.

A separate eastern China-based buyer source noted that sellers had become more active for lower-CV grades, with 4,500 Kcal/kg NAR coal offered at 840 yuan/t finding little interest from buyers. "Buyers grow wary of chasing prices and expectations of supply-side policy support strengthened," said an Ordos-based trader source in Inner Mongolia.

Power plant coal inventories presently do not yet point to an urgent, broad-based replenishment. Power plants under six major coastal groups saw stocks gain 3.95% year on year as of October 15, while their coal consumption was down by 1.54%, data showed.

Sources said most utilities still considered their inventory cover manageable and were limiting purchases to selective high-CV cargoes, suggesting that restocking demand could emerge gradually rather than immediately.

Some participants forecast that toward late October, the first round of winter restocking will have run its course and railway maintenance is due to wrap up no later than October 26, removing both supports and likely stalling prices. November could see prices come slightly under pressure as Shanxi production resumes and supply improves, while December will hinge on peak heating demand and cold snaps.

On October 16, Sxcoal's CCI index for domestic 5,500 Kcal/kg NAR coal at Qinhuangdao port gained 5 yuan/t day on day to 1,028 yuan/t, the highest since October 12, 2023. The index for 5,000 Kcal/kg NAR coal climbed 5 yuan/t to 930 yuan/t and 4,500 Kcal/kg NAR coal increased 4 yuan/t to 832 yuan/t, both hitting nearly three-year highs.

Imported coal edges up

Seaborne import thermal coal prices edged up, yet remaining broadly steady. Coastal power plants that had replenished earlier became less willing to lock in cargoes; high offers backed by supply tightness still forced a few of them to accept high levels.

One southern Chinese utility reportedly bought 3,800 Kcal/kg NAR coal at prices below 710 yuan/t, CFR South China with VAT, translating to $82/t FOB for Panamax cargoes. It also bought Australian 5,500 Kcal/kg NAR coal at around 1,055 yuan/t, CFR, or $117/t FOB on a Capesize basis. Both prices were higher than earlier transaction levels.

Offers for Indonesian 4,600 Kcal/kg NAR coal were heard at index plus $7/t or more, and 3,800 Kcal/kg NAR coal was quoted at a premium of $4/t or more to the index.

"If Indonesian output fails to increase meaningfully, prices are unlikely to fall, as Chinese domestic supply guarantees still appear inadequate," said a Singapore-based trader source.

Market participants therefore saw limited downside for imported coal, citing uncertainty over Indonesian supply, reports of reduced November loading availability and potential winter-related disruption to Russian shipments.

Inventory drawdown continued at southern receiving ports, with Guangzhou port holding 2.36 million tonnes on October 15, down 8.2% week on week and 10.7% year on year, while Fangcheng port held 2.41 million tonnes as of October 16, down 26% month on month.

These factors, coupled with the slow recovery in domestic mine output, could keep seaborne prices supported, although the retreat in immediate buying interest is likely to cap gains in the near term.

On October 16, the CCI index for Indonesian 3,800 Kcal/kg NAR coal edged up by $0.3/t day on day to $80.3/t FOB and $93.3/t CFR South China port. The index for Australian 5,500 Kcal/kg NAR coal was up $0.5/t to $138.5/t CFR.